As Britain’s biggest supermarket, Tesco already has its tentacles into most of us. The latest news from the retail giant, which already runs an estate agent service, is that it will strengthen its grip on the property market by building homes. Four ‘mini-villages’ are planned in the South East and a series of smaller mixed homes, shops and leisure developments in Ipswich and the North East.
Of course this raises more questions over the power and monopoly of Tesco with some critics saying that soon the supermarket will have more of your personal details than the Government. You can already buy a house from Tesco, fill it with furniture from the store and use its financial services to pay for it all. The company has recently announced record profits of £3.4bn – up 10% on last year.
The Tesco mini-villages are due to be built in the following locations:
In March, Lambeth Council gave the go-ahead for it to build 200 homes, a bus depot and an ice rink in Streatham. In May, Tesco is hoping for approval for the 400 homes, primary school, hotel and park that are planned for Bromley-by-Bow, near the Olympic Park. It is apparently also already in advanced discussion with Dartford council over a potential development of 1,000 homes.
Spen Hill is the supermarket’s development arm and it hopes to introduce its ‘mixed-use’ model of shopping, leisure and residential homes to other areas. Commenting on the strategy, a Tesco spokesman said: “Through mixed-use developments, such as Bromley-by-Bow and Streatham, we are able to invest and create jobs in areas many other developers cannot, and will not.”
There is no doubt that Tesco are creating jobs and investing, but their ultimate motive has to be their own bottom line and the shareholders. Josh Ryan-Collins of the New Economics Foundation sees the supermarket’s overtures in the property market as being somewhat dangerous: “There is a need for more affordable housing but there is a danger with Tesco’s moves. If they provide the mortgage, if they act as estate agent, if they provide a credit card, if they sell you a house, they will end up with more personal information about you than the Government.
The arguments will go on, but love them or hate them, Tesco are clearly playing for keeps in the property market. Local Governments will continue to give planning permission if the supermarket can convince that it will provide jobs and investment in the target areas. The only threat to Tesco’s plans would have to come from central Government, perhaps in the shape of the retail giant being referred to the Competition Commission by the Office of Fair Trade, or the Secretary of State for Business.